Chiron as consolidator


Chiron Corp.'s $95 million move to combine its Chiron Vision business with the ophthalmic surgical division of Iolab aims to create a deep product line capable of providing a disease management approach to the sector.
CHIR last week said it would acquire the Iolab division from Johnson & Johnson for $95 million, creating the second largest ophthalmic surgery company after Alcon.
Iolab has been for sale since last year, and Ciba bought the pharmaceutical portion of the business last August. CHIR, in which Ciba holds a minority position, said it anticipates collaborating with Ciba Vision.
CHIR will pay slightly less than 1x sales for Iolab. The Emeryville, Calif., company will use $55 million of its own cash and is borrowing $40 million to pay for the rest.
Iolab was marginally unprofitable in 1994, with sales slightly above $100 million. Similarly, Chiron Vision also was unprofitable, with sales of $106 million.
The ophthalmic surgery business has been under cost pressure and has been a highly fragmented field, according to CHIR spokesperson Larry Kurtz. In addition, reimbursements for intraocular lens procedures have been declining. As a result, it's been difficult for companies to make money and the sector has been consolidating, Kurtz said. Chiron Vision has been participating in the trend, already acquiring the German company Adatomed, IntraOptics, a producer of intraocular lenses